the first alleged procedural fairness issue - the failure to disclose the views of Mrs Ginnane set out in the Draft Management Report.
81 This part of the applicant's claim raises a not straightforward question as to the circumstances, if any, when something must be disclosed to the party affected by a decision, when the decision-maker disavows the relevance of that matter.
82 It is important to recognise that in approaching this question at least two important preliminary considerations need to be addressed. First, as here, if the decision-maker is a corporation and the organ of decision-making is comprised of more than one person, it is to the individuals comprising the organ that one must look to assess whether the matter is disavowed: Dunlop v Woollahra Municipal Council [1975] 2 NSWLR 446, 484-85; Parramatta City Council v Hale (1982) 47 LGRA 319, 335-36 and 348; and Telstra v Hurstville City Council (2000) 105 FCR 322, 381-82 per Wilcox J. Secondly, care must be taken to identify just what it is that is disavowed. It may be that it can be said perfectly accurately that a particular report or the oral presentation of a particular report was not taken into account and did not influence a person's mental processes in making the decision. It might be quite another enquiry as to whether the matters dealt with in that report, that is part or all of its subject matter was irrelevant to, or unconnected with, and so did not influence, the person's mental processes in making the decision.
83 The applicant here relied in particular on what Brennan J said in Kioa v West (1985) 159 CLR 550 at 629:
Nevertheless in the ordinary case where no problem of confidentiality arises an opportunity should be given to deal with adverse information that is credible, relevant and significant to the decision to be made. It is not sufficient for the repository of the power to endeavour to shut information of that kind out of his mind and to reach a decision without reference to it. Information of that kind creates a real risk of prejudice, albeit subconscious, and it is unfair to deny a person whose interests are likely to be affected by the decision an opportunity to deal with the information. He will be neither consoled nor assured to be told that the prejudicial information was left out of account. [emphasis added]
84 This passage indicates that it is not sufficient to seek to shut out or disavow the relevance of material if it is "credible, relevant and significant" and if it is material of the kind that creates a real risk of prejudice, albeit subconscious. To a degree, as the last sentence of the passage shows, the necessity to disclose such material in order to accord procedural fairness is not based on answering a causal question as to whether the material did in fact play a part in influencing the decision, but rather on the appearance of a fair hearing and the maintenance of confidence in the administrative process and judicial review of it.
85 In Roderick v Australian & Overseas Telecommunications Corporation Ltd (1992) 39 FCR 134 at 145 Hill J (with whose reasons Keely J and O'Loughlin J agreed) identified the risk of prejudice in the decision-making process as the determinative factor. Where such was present, as Hill J said, "it will be no answer … to say that the Tribunal was of the opinion that it was not affected by the evidence."
86 In Johns v Release on Licence Board (1987) 9 NSWLR 103 the New South Wales Court of Appeal (Kirby P, Hope JA and Priestley JA) was concerned with circumstances in which the decision-making board had a summary of matters before them, which summary contained a factual mistake. The argument was that it was unlikely to have influenced the board. The document had been before the board on a prior occasion. The Court said (in its joint judgment):
…The importance of the mistake in respect of Mr Madden [contained in the document] is not that it did influence the decision of the Board on this occasion. It is rather that it couldhave influenced that decision. …
[emphasis in original]
87 However, that was a case in which it was a matter of speculation as to what weight, if any, was given to this consideration.
88 In Re Macquarie University; Ex parte Ong (1989) 17 NSWLR 113 Hope JA, writing as assessor to the Visitor to Macquarie University, and dealing with the situation where one member of the University Council took into account the contents of an undisclosed and adverse letter written by the Vice-Chancellor and where another document, a committee's report, was the most significant matter taken into account by the Council, said:
… In my opinion even if it cannot be determined whether other Council members took the letter into account, it was a denial of natural justice not to have given Dr Ong an opportunity to answer the adverse material which it contained.
89 In Bromby v Offenders' Review Board (1990) 22 ALD 249, the New South Wales Court of Appeal (Kirby P, Clarke JA and Handley JA) dealt with a somewhat more complex and attenuated factual circumstance. There was no evidence that the board or any of its members had acted on the material in question. The evidence showed that two members of the board had files which contained material which had not been disclosed to the applicant's solicitor at a hearing that had been held. Kirby P approached the matter by applying Johns, supra and stated (at p 261) that "the concern of the law was not only with the actuality of procedural fairness but also with the manifest appearance that fairness has been observed." Clarke JA and Handley JA differed, not so much in point of principle, but because of a somewhat closer analysis of the facts. At p 266 they noted that the evidence required the applicant to submit that a single member could have had access to the material and could have relied on it and that dual possibility meant that the decision should not stand. The evidence was that the material was in the members' files, but the evidence did not disclose what use was made of the files in relation to the present decision or as a matter of practice. Clarke JA and Handley JA noted that there was no evidence that these files were consulted, as there was in Hall v Release on Licence Board (unreported, New South Wales Court of Appeal, 27 June 1989). The difference between Kirby P, on the one hand, and Clarke JA and Handley JA, on the other hand, was the former's reliance upon the appearance of matters, even in circumstances where the evidence did not disclose that the material had ever been seen or consulted by the decision-makers. Clarke JA and Handley JA threw no doubt upon the approach of Hope JA in Ex parte Ong, supra, where one of a number of Council members did take the matter into account, or of the Court of Appeal in Hall, supra, where there had been consultation of the material. However, they did say that a "theoretical possibility" that adverse and undisclosed material had been considered was not sufficient.
90 The decision in Bromby is not authority for the irrelevance of the appearance of fairness in the process. It is one strand underlying what Brennan J said in Kioa. It was a consideration discussed by Foster J in Youssef v Minister for Immigration and Ethnic Affairs (1987) 14 ALD 550 at 552 where his Honour said:
Does the disavowal operate to remove this procedural fairness? Accepting as I do - and I stress that this was conceded by counsel for the applicant - that the disavowal is in every respect bona fide and that the delegate sought to act fairly towards the applicant, I am nevertheless left with a clear impression that the applicant has been denied natural justice in relation to the assertions made by and on behalf of the archbishop against him and his case.
Whilst a decision-maker can, by an effort of will, exclude from his conscious deliberations the effect of material of this kind and even convince himself that he has totally ignored it, the potential of influence at a subconscious level remains, with the possibility of the creation of an adverse attitude towards the party at whom the material was directed. That this can and does occur is clearly recognised in the passaged cited from the judgment of Brennan J in Kioa. It is indeed a problem of which judicial decision-makers are acutely aware and against which they must constantly be on guard.
In my view, in this case, the strength of the attack, especially having regard to the quarter from which it came, was such as almost inevitably to colour the decision-maker's subconscious attitude towards the applicant. The only way of achieving confidence in a fair decision was to raise the matter with him and provide an opportunity to him to respond to it.
91 See also Burchett J in Claro v Minister for Immigration, Local Government and Ethnic Affairs (1993) 119 ALR 342 at 353.
92 The relevance of the appearance of procedural fairness, though in a somewhat different context, was made plain by Barwick CJ in Stollery v Greyhound Racing Control Board (1972) 128 CLR 509 at 519. It was a consideration clearly underlying what Hill J said in Roderick, supra.
93 I do not read what Mason J said in Kioa, supra at p 588 in his Honour's differentiating of a lack of reference to material from a disavowal of material as a rejection of what Brennan J said at p 629. Nor do I read what McHugh J said in Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 179 ALR 238 at [140] as limiting what Brennan J said at p 629 to matters that the repository of the power proposes to take into account. On the contrary, his Honour's citation of the part of the first sentence emboldened in the paragraph cited at [83] above indicates to me a measure of agreement by him with what appears in that paragraph, given the centrality of that first sentence to Brennan J's views at p 629.
94 From the above, I would extract the following legal principles relevant to the disposition of this case. First, if there is a real risk of prejudice in the decision-making process in not disclosing the substance of material before the decision-maker, bona fide disavowal of reliance on it will not be sufficient to warrant the non-disclosure of the material. The sufficiency of the existence of a real risk of prejudice reflects what the Court of Appeal said in Johns, supra that the enquiry is whether the material could have influenced the decision, not whether in fact it did influence it. Secondly, there will be such risk where the material is, in the particular circumstances, credible, relevant and significant to the decision. This is to be judged leaving aside the disavowal. Relevant to this assessment will be, amongst other things, the quality of the material and the risk of subconscious influence. Also relevant to this assessment will be the degree to which the fairness of the process is likely to be thrown into question on revelation of the existence of the material and that it was before the decision-maker. Thirdly, if one member of a decision-making organ takes the undisclosed material into account, that will suffice as a ground to set aside the decision if it is of the kind earlier described. Fourthly, as reflected by the use of the adjective "real" in the phrase "real risk of prejudice", a merely theoretical possibility of prejudice will not suffice.
95 With those principles in mind it is necessary to turn to the evidence. Mrs Ginnane gave evidence. She said that at the April Council meeting there was discussion "around the Council table", led by Mr Rogers, which resulted in a "general request of the Council as a whole" at the meeting for her to "do a review of NIB's management with a view to understanding how the error occurred in the first place". In her affidavit of 9 April 2001 Mrs Ginnane said at para 114:
At that meeting, I was also requested to prepare an internal review of NIB's operations and performance, addressing the attributes required of a well run registered organisation, and to provide Council with a qualitative and quantitative analysis report at its next Meeting.
96 It is plain from this evidence that the genesis of the requested report was the Council seeking to understand how this error had arisen.
97 In her oral evidence in chief, Mrs Ginnane dealt with the Draft Management Report. She said that she prepared the document which was placed before the Council and that in her presence the Council decided the following in relation to what was to be done with it:
They decided that at the end of the process we should seek an assurance that the reasons why the error occurred should have been addressed.
98 This last evidence was, I take it, intended to be her recollection of what was contemporaneously recorded in the minutes of the Council meeting of 5 May 2000 and referred to at [53] above, which Mrs Ginnane accepted was accurate. It is clear from these minutes that the Council accepted what was in the Draft Management Report for the purposes of deciding what they did on 5 May.
99 In her evidence, Mrs Ginnnane sought to express a separation of task between dealing with the January request, as had been done in April (see [42] above) and with any further submission, on the one hand, and dealing with the obtaining of assurances from the applicant that procedures were in place to ensure that the revealed error would not happen again, on the other hand.
100 Whilst, in one sense, there was this separateness of these matters, they were clearly related. The Draft Management Report and the request for it arose out of the errors in respect of which an adjustment had been requested. Also, the request for assurances was to abide, temporally, the "process… in relation to any application to correct or make an adjustment in relation to the error": (see Tp 58 ll 29-32.)
101 The Draft Management Report contained Mrs Ginnane's views and it was based in part on the January 2000 submission of the applicant and in part on her experience with the applicant. She agreed that it was expressed in strong terms and contained trenchant criticism of the applicant. Whilst there was some exchange between counsel and Mrs Ginnane about the matter in cross-examination in which Mrs Ginnane emphasised that the view that the error was the fault of the applicant was one which the applicant expressed and she only "accepted" this, I find that from April 2000 she formed her own view (drawn partly from what the applicant said in its submissions) that she regarded the error as having been caused by the applicant's management deficiencies. I think it an oversimplification for Mrs Ginnane to say that she was merely accepting the applicant's own views in its January submission in which it did not shrink from accepting some responsibility for what had happened. The views of Mrs Ginnane in the Draft Management Report went beyond adoption of some self-criticism of the applicant. They were blunt, trenchant and strongly expressed and the product of her own independent consideration, though taking into account the applicant's own expressed views. Mrs Ginnane's view which she expressed to the Council was that the error had been caused by the applicant's management deficiencies as reflected in the Draft Management Report. She said these management deficiencies were caused by the matters listed in the last six bullet points referred to in [52] above, matters which could only be described as damning criticism of the applicant's management (notwithstanding the preferred more anodyne descriptions of them by some of the witnesses in cross-examination).
102 Mrs Ginnane was cross-examined about the agenda paper for the 11 August 2000 meeting set out at [67] above. She indicated that the four bullet points in [67] above reflected her view and were consistent with the contents of the draft reasons, indeed she agreed that the latter put "in legal terms" (reflecting the assistance of solicitors in drafting them) the substance of these four points.
103 Mrs Ginnane gave evidence in re-examination that her views expressed in the Draft Management Report did not influence, and were not taken into account in her decision as to what to recommend to the Council. She said: "They [the management review reflected in the Draft Management Report and the decision on the recalculation] were separate issues". I will deal more fully with this evidence when I deal with the other witnesses on this topic. However, at this point, I would merely say that whilst I do not think Mrs Ginnane was intending to be in any way untruthful, I have grave doubts that the matters in that Draft Management Report exercised no influence on her decision to recommend as she did. The last two bullet points in the agenda paper clearly raised the question of good governance of other funds. Her strong views about the cause of the problem, that is the poor governance (in her view) of the applicant, were matters of objective conceptual relevance in the assessment as to whether to disrupt the affairs of other RHBOs by a recalculation. Whilst Mrs Ginnane may have thought this matter capable of excision as a matter to take into account, I have real difficulty in accepting that it played no part, at least at a subconscious level, in her coming to the recommendation she did. She was not a decision-maker, but she was the full-time CEO of a wholly part-time board. From the terms of the Draft Management Report and my assessment of her while giving evidence, I conclude that she was a person of independent mind who in this case reached clear and unequivocal views about the recommendation to the board and about the applicant's affairs. I think that there was a real risk that views of the applicant's management and of that as the cause of the error influenced her decision concerning what to recommend to the board.
104 Mrs Ginnane gave evidence in re-examination that the separateness of the issues referred to in [99] above was recognised by the board in discussions in which a decision was made to defer the sending of the letter to the applicant seeking reassurance about its management. The minutes of the meetings of June and July contain no reference to such a decision. However, the draft minutes contain a reference to the board agreeing to delay action to seeking assurances from the applicant until after the decision on readjustment was made. This reference was excised from the final minutes. However, there was some delay in sending the letter. It was not sent until 14 August 2000, three days after the decision.
105 I think much of the dispute about these matters is irrelevant. There were two things to do: (a) decide on the application; and (b) ask for assurance. Both were done. The board made up its mind about (b) on 5 May 2000 upon receiving and considering Mrs Ginnane's strongly worded and trenchant criticisms in the Draft Management Report. The letter was sent, on 14 August, as the board requested in May. The views of Mrs Ginnane in the Draft Management Report were not provisional or conditional. They were not given to the board as such. The board received them, considered them and decided to ask for assurance. The views were given to the Board in the context of explaining the error of the applicant in respect of which the adjustment was claimed. They were views which laid the cause and the blame for the error in the plainest of terms at the feet of management of the applicant. To the extent that an explanation for how the error occurred was relevant to the decision on readjustment, Mrs Ginnane's views , objectively speaking, were central.
106 Mr Graham Rogers, a member of the Council, gave evidence. He said in para 8 of his affidavit:
In forming my view that the Applicant was not entitled to reinsurance adjustments, I did not take into account the [Draft Management Report], nor did I take into account any verbal presentation of that report made at the Council meeting of 5 May 2000, at which I was also present.
107 He was cross-examined. He accepted that the four matters identified in the briefing paper for the August board meeting ([67] above) were some of the reasons for rejecting the claim. He too was of the view that the reasons were the "legal form" of the matters in the board paper. Mr Rogers accepted that one matter which he took into account was that the error was one which was not beyond the applicant's control. This reflected what was in the reasons at para 3.3.17 ([72] above). However, Mr Rogers rejected the proposition that "poor management" of the applicant was taken into account.
108 Mr Rogers recognised the strong criticism of the applicant's board in Mrs Ginnane's draft report. He accepted that he had not forgotten it at the time of the decision. He accepted that in May 2000 the board acted on the contents of the Draft Management Report, having accepted those contents. He recognised a clear overlap between the Draft Management Report and the explanation in it for the error and the request for the assurance sent on 14 August. Both the error and the need for assurance were explained by the poor management, at least in the opinion of Mrs Ginnane. He said that though the fact that the error was not beyond the applicant's control was a factor in reaching his decision, the conclusions of Mrs Ginnane as to the poor management of the applicant were not.
109 Ms McDonald, a Council member, gave evidence. She stated in her affidavit:
8. On 11 August 2000, in forming my view that the Applicant was not entitled to reinsurance adjustments, I did not take into account the [Draft Management Report]. The reasons for my decision, and the matters on which it was based, are set out in exhibit GEG-45 to the affidavit of Gayle Elizabeth Ginnane sworn on 9 April 2001 [the terms of the decision sent to the applicant on 11 August 2000]. I did not take into account any verbal presentation of that report made at the Council meeting of 5 May 2000, at which I was also present.
110 Ms McDonald said that prior to the meeting she had read her board papers, but had not made up her mind about what to decide about the applicant's request. At the meeting she did form the view that the request should be rejected. She was taken to the four bullet points listed in the agenda paper ([67] above). Two of the matters she did recall taking into account were the matters in the third and fourth bullet points. These encompassed the good governance and management of other funds which had budgeted in good faith on the reported reinsurance amounts. She agreed that one matter she took into account was that the error had been caused by matters which were not beyond the control of the applicant.
111 It was also clear from her evidence that the fault of the applicant for the error was discussed at the meeting of 11 August. As far as she was concerned, her reasoning process was that she took into account (as three major matters) the nature of the error, how it arose and the quantum of it.
112 The trickiness of the relationship between the criticisms of Mrs Ginnane in the Draft Management Report and the August decision is reflected in the following evidence of Ms McDonald in cross-examination. I should say at this point that I accept her evidence completely:
Q: Could I ask you this, Ms McDonald: as at August 2000 when you participated in the decision to reject NIBs claim, you were of the view, were you not, that NIB's management was defective in so far as it had led to the error, the subject of the application?
A: In reaching my decision in August, I considered a range of factors. One was the governance and management in relation to the particular matter, re-insurance that was before us.
Q: And when you speak of the governance [and] management you are speaking of the governance and management of NIB, are you not?
A: Yes.
Q: And your view at that time of the governance and management of NIB, so far as it related to the error, was that governance and management was deficient?
A: It was not as strong as it should have been.
Q: And what I suggest to you, Ms McDonald, is that a factor contributing to that view of yours was the strong criticism that had been made of NIBs management in the draft report that was tabled in May 2000?
A: I don't agree with that. I don't believe I took that report into account at all. It was on the facts discussed at the meeting of August 2000.
Q: Can I put this to you, you may not have taken into account the report as such, but you could not rule out the possibility that you remained influenced by the strong criticisms that had been made of NIB in that report?
A: Look, I don't recollect taking that report or its contents into account at all. I made the decision on the facts that were presented at that August Board meeting, from the material that we received beforehand and in the discussion that went on at that Board meeting.
Q: One of the matters being discussed was the governance and management of NIB, was it not?
A: In relation to the historical matter of the re-insurance I can't recollect what was discussed in terms of particular issues of governance.
Q: But as a topic it was discussed, was it not?
A: My recollection is that it was.
113 That evidence was both sensible and compelling. The governance and management of the applicant was discussed at the 11 August meeting. There was a perceived deficiency in its governance and management. Those views had already been tendered to and accepted by the Council in May. For her, how the error arose and the governance and management of the applicant in relation to the reinsurance were clearly relevant in deciding whether a financial readjustment, consequent on an error, should be made in the best interests of RHBOs generally and the good administration of the Fund. Whilst the Draft Management Report was not before the board, what had been imparted to Ms McDonald, and what she clearly and frankly stated that she took into account, were the reasons for the error which encompassed the quality (or defective quality) of the governance and management of the applicant in relation to the error. I find that these matters were discussed at the meeting and that they formed important considerations or factors in Ms McDonald coming to the view she did. Also, I think that it was both logical and sensible for her to give this relevance or importance to those matters in making her decision. The 'good administration' of the Fund is an expression plainly wide enough to make relevant as a consideration in a decision such as this whether or not sloppy management should affect the question of a readjustment, with consequent disruption to the operation of the Fund and to the other participating commercial entities.
114 Mr Richardson, the Commissioner of the Council, gave evidence. In his affidavit of 19 June 2001 at para 7 he said the following:
In making this decision, I state that Council did not take into account the [Draft Management Report], nor did Council take into account any verbal presentation of that report made at the Council meeting of 5 May 2000.
115 After debate, I ruled that I would accept this evidence, but only as evidence of his own decision-making process.
116 Mr Richardson was asked about the Draft Management Report. He did not accept that the board acted on it in May. Plainly, it did, to the degree identified in the May minutes ([53] above). He did not recall the topic of the applicant's management coming up again. I accept Ms McDonald's evidence and find that that topic was discussed during, at least, the August meeting. Mr Richardson disagreed with the proposition that relevant to the application for adjustment decided on 11 August was the quality of the applicant's management, though he agreed that one reason for rejecting the application was that the error was not beyond the applicant's control, which he agreed involved a qualitative assessment on his part of the applicant's management.
117 Mr Richardson agreed that the four bullet points in the August briefing paper ([67] above) were considerations taken into account, but he said that his recollection was that most of the discussion concerned the draft statement of reasons (see generally [72] above) and whether the board agreed with that decision and reasons. To the extent that this evidence might be seen to conflict with what Ms McDonald said about the governance and management of the applicant being discussed at this meeting, I prefer the evidence of Ms McDonald. In any event, Mr Richardson saw no inconsistency between the agenda paper and the draft reasons.
118 The two other members of the Council who participated in the decision of the Council on 11 August 2000, Ms McNee and Professor Stoelwinder, did not give evidence. This was explained in the evidence as brought about by a combination of inconvenience and lack of ability. Ms McNee is seriously ill and has been diagnosed as such from July 2001. I am satisfied that, given the brief description of her condition, obtaining assistance from her since July and not having her available for cross-examination has been explained. Professor Stoelwinder has been incommunicado while on holidays overseas for two months. He arrived back in the country just before the case began. No attempt was made to put his evidence forward before August 2001. Nor was any attempt made to put Ms McNee's evidence forward prior to July 2001. I note that the affidavit evidence of Mrs Ginnane and Mr Richardson (the CEO and Commissioner) was filed prior to July 2001. However, that of Ms McDonald and Mr Rogers was filed only shortly prior to the hearing. Whilst there is no clear evidence of it, I infer that a later decision was probably made to call all members as well as the CEO and Commissioner. In any event, given the conclusions that I have come to, it is not necessary to examine whether I should, in the circumstances, rely upon the operation of Jones v Dunkel (1959) 101 CLR 298.
119 On the basis of the principles to which I have referred ([83] to [94] above) the substance of the contents of the Draft Management Report should have been disclosed to the applicant in reasonable time for it to consider the views and make an appropriate response. Not to do so denied the applicant procedural fairness in a substantial manner.
120 I have already sufficiently described the contents of the Draft Management Report. They were the views, not said to be provisional, of the CEO of the Council to the effect that the error had been caused by deficiencies in governance and management of the applicant, which views could only be described as damning.
121 The board read and considered those views and acted on them in resolving as it did in May to seek assurances of the applicant. Whilst there was some difference among those cross-examined as to whether they recalled having the Draft Management Report to mind on 11 August 2000, the circumstances were far removed from that described by Clarke JA and Handley JA in Bromby, supra. The Draft Management Report had been requested by the board, in the context raised by the errors the subject of the readjustment request and had been read, digested and acted upon.
122 The Draft Management Report dealt in detail with the cause of the error. The fact that error was not beyond the applicant's control was an avowed and express consideration: para 3.3.17 of the reasons ([72] above). This aspect of the reasons identifies the question of how the error arose, to a degree. The respondent and the witnesses sought to draw a clear boundary between what was expressed in para 3.3.17 and a fuller understanding of the views put to the board of the applicant's "control" over the error in the Draft Management Report.
123 For at least one board member, Ms McDonald, how the error arose, somewhat more generally, was central to the decision. This was in the context of the governance and management of the applicant being discussed at the meeting of 11 August 2000. Whilst I accept Ms McDonald's evidence that she did not recall taking the Draft Management Report or its contents into account, she most definitely considered the discussion at the meeting about the governance and management of the applicant. In the circumstances, I find that that discussion must have involved and reflected the matters, or at least some of them, raised in the Draft Management Report. She took that discussion into account in her decision, one important reason for which was how the error arose. Only three documents, all of which were before the board, dealt with that question: the 31 January submission, the 6 July submission and the Draft Management Report. In this way the matters dealt with in the Draft Management Report directly influenced at least one member of the Council, Ms McDonald.
124 I also think it highly likely that the matter which affected Ms McDonald influenced all other members of the board. The board submission plainly raised the question of the good governance of other RHBOs. In the context of a discussion at the meeting of the deficient governance of the applicant and the avowed taking into account that the error was not beyond the applicant's control, I find the disavowals of relevance of the Draft Management Report and its contents by Mr Richardson uncompelling. Mr Richardson's evidence set out at [116] above can only sensibly reconciled by concluding that, to a degree, he did take into account a qualitative assessment of the applicant's management.
125 Mr Graham Rogers seems to have been mainly influenced by the effect of the recalculation on other funds. He did say that the control of the applicant over the error was a factor, but that Mrs Ginnane's conclusions as to the poor management of the applicant were not. Whilst I accept him as a truthful witness, for the reasons I have otherwise expressed about the objective relevance and significance of Mrs Ginnane's views of the management of the applicant to the subject matters of the discussion and the fact that the topic of the deficiency of the applicant's management was discussed at the meeting, I treat his evidence with considerable caution. I conclude that it is likely that the views of Mrs Ginnane had an influence on his decision. For the same reasons I conclude that it is likely that the views of Mrs Ginnane had an influence on the decisions of Ms McNee and Professor Stoelwinder. Also, in relation to these latter two, the commonsense approach of Ms McDonald, and the importance to her of how the error arose, reinforces my conclusion in relation to them.
126 I am made more confident in these conclusions by the plainly credible, relevant and significant nature of the information. They were the views of the CEO, put to the board about the cause of the errors the very subject matters of decision. The circumstance of the errors arising "not outside NIB's control" was one reason for the decision and the related or extended question of the degree of fault involved was plainly a consideration within the universe of matters open to the decision-makers in considering the matters in section 3A.1(3)(b). If a large error, which could give rise to a significant disruption to the financial affairs of all RHBOs and which could destabilise the operation of the Fund could be shown to have occurred through events entirely beyond the control of the mistake-maker (eg a computer virus, which could not be detected by the most advanced anti-virus programmes) that seems to me to place an applicant for readjustment in a stronger position in an enquiry under para 3A.1(3)(b) than would be an applicant whose flagrantly neglectful business systems had caused the error. (I am not by this making any finding about the applicant or its management.) An analysis of how the error arose may not be a consideration mandated by legislation (Minister for Aboriginal Affairs v Peko Wallsend Ltd (1986) 162 CLR 24),but it is a consideration within the universe of relevant matters in the sense discussed by Deane J in Sean Investments Pty Ltd v MacKellar (1981) 38 ALR 363, 374-76.
127 For the above reasons, I find that there was a real risk that the undisclosed material being the Draft Management Report or, perhaps more accurately, the views of the CEO contained therein, influenced the decision of the Council. It is only sufficient that I find this reality of risk. If it were necessary, I would be prepared to find, on the basis of Ms McDonald's evidence and the other matters which I have discussed above, that the views of Ms Ginnane are likely to have had an influence on the decision. As I said earlier, the disavowals (all drafted in the affidavits in similar terms) are less than compelling when one recognises, in particular, the discussion at the meeting of 11 August of the governance and management of the applicant and the common sense of Ms McDonald's evidence as to the relevance to her of how the mistake arose and the relationship of that to the question of the governance and management of the applicant, and in circumstances where a clearly related, though attenuated, question was avowedly taken into account - the control of the applicant over the error.
128 The respondent emphasised that the Draft Management Report and the consideration of it were part of the wider prudential functions of the Council. As I have earlier discussed, it is undoubted that these functions, wider than merely the operation of the Fund, existed. However, the Draft Management Report was called for by the Council in seeking to understand how these errors arose. I do not think that its relationship to the wider functions in any way lessens what I have earlier said about its relevance to the decision in question. Also, I do not think that the fact that other steps were being or were to be undertaken, such as the assurances from the applicant or the wider enquiry concerning all RHBOs, in any way lessens the relevance of the Draft Management Report to the decision in question.
129 It was said that the Draft Management Report was a draft. It was so entitled, but it contained Mrs Ginnane's then views, which were not said to be provisional. They were views she proffered to the Council. The Council received them and, to a degree, acted on them.
130 It was perfectly appropriate for Mrs Ginnane to prepare the document, especially if the wider responsibilities of the Council called for it. However, that does not lessen the relevance of it, in the circumstances, to the decision in question.
131 Thus, in my view, the applicant was denied procedural fairness in the making of the decision the subject of review.